Advanced Research and Invention Agency Bill

Lord Broers Excerpts

Report stage
Tuesday 14th December 2021 Lords Chamber

I hope that explains these five amendments, and that we will take this opportunity to put intellectual property right at the heart of ARIA’s functions and the Bill, as it should be.

[Lord Broers (CB)]

My Lords, I thank the noble Lord, Lord Lansley, for his kind remarks. I have spent most of my life in this environment working on very complicated projects, and I feel very strongly about this issue. I therefore support Amendments 2, 3, 21 and 22, which would secure ARIA’s rights to retain and exploit the intellectual property generated by its research and to obtain intellectual property from elsewhere in order to advance its projects. As I have mentioned before, the projects that ARIA will be working on will draw upon knowledge from all over the world. It is unlikely—almost impossible—that it can generate all its own intellectual property. The world has changed; that is not the way high technology develops today.

It is also of prime importance to the creative engineers and scientists working on ARIA projects that they feel that their creativity is recognised. There are various ways in which this recognition can be granted, but the most straightforward is for them to receive financial benefit, usually through shared ownership of the intellectual property. High-technology companies and universities have found it effective to have a fraction of the income from patents and other intellectual property go to those who create the intellectual property. This creates a sense of fairness and generates loyalty. The result is highly motivated employees who are not tempted to keep their ideas to themselves and go elsewhere where they can be more fairly treated. This is essential. There is massive competition for the top technological brains in this country. We will not get them into ARIA if they think that they will be entangled in a whole lot of bureaucratic government regulations that prevent them from getting the benefits of being entrepreneurs who are free in the world.

I notice that Amendment 17 seems designed to deal with such errant behaviour—how dare they consider doing such things?—but this sort of thing has its dangers, in that its very existence shows that the organisation does not trust its employees, even encouraging them to take their talents elsewhere. It happens with everybody. When you are working on a project, you suddenly have a brilliant idea. You know that you have cracked the nut and really opened up a way for progress, and your first thought is, “My God, I could be rich if I took this off and formed my own company”.

This happens with big companies. I spent a lot of time in IBM, which had to be terribly careful because it provided huge resources for people to make immense progress, but at the same time we did not want people, when they made that progress, to be immediately motivated to leave and exercise that somewhere else, and make more money; I am afraid that money is a motivation. In IBM, in essence you got points towards quite a lot of money when you invented something. You also got a very large award if you did something that opened new pathways in a technology, over and above your salary.

That is the way a company such as IBM in the great days, and Bell Labs subsequently, kept their brilliant people working there. ARPA has that reputation. You will be treated fairly, do well and get paid a lot if you work in ARPA or DARPA; they are prestigious places to work. I imagine that ARIA will be just like that; it will be a prestigious place to work and there will be lots of reasons for that. At times, there has been concern in the UK about the brain drain out of the country. Of course, this has been largely because the incomes offered to creative engineers and scientists have been higher elsewhere, but it is also because it has been perceived that their creativity will receive more recognition.

Those are my remarks on intellectual property for the noble Lord, Lord Lansley. That is the core of what we are doing; it is the intellectual output. It is a very familiar feeling among academics.

I also support Amendment 1, because I believe that it should help to arrest the flow of technology businesses that originate in ARIA being acquired by overseas businesses, which is a concern that everybody has. I just wonder whether 10 years is sufficient time for this to be effective. There are two very important examples of our losing, or potentially losing, outstandingly successful companies originating entirely in the UK.

The first is Arm, which designs the microelectronic chips for the majority of the world’s portable information and communications equipment. Founded in 1990, it went public in 1998, and was then acquired financially by Japan’s SoftBank for about $32 billion in 2016, 26 years after it was founded. If conditions similar to those in this amendment had been in place in the UK, it would have had little or no effect, and its effect would have been even smaller today in preventing the threatened takeover by the US company Nvidia, which began in 2020. Fortunately—as an aside—the American Federal Trade Commission looks as though it may prevent that takeover anyway because of the threat it presents to world competition in the semiconductor business.

The second company is Solexa, which was based on the fundamental research of Balasubramanian and Klenerman in Cambridge that enables the high-speed decoding of DNA. They obtained their initial seed funding to form Solexa in 1998, and in 2000 Solexa’s corporate facilities were established. Solexa was then acquired by Illumina in early 2007, and now generates billions of dollars of revenue. The conditions of this amendment might have slowed if not stopped this takeover. The amendment would help to retain businesses emerging from ARIA in the UK, but it is also important to enhance the activities of the Competition and Markets Authority, which is looking at that, to solve this problem much more widely in the UK. The loss of Solexa was a laughable mistake— one of the most exciting companies in the most exciting scientific field being pursued, and we just wave it goodbye.

We have to fix these problems. I will vote for these amendments if they are put to a Division.

[Viscount Stansgate (Lab)]

My Lords, I rise to speak in support of Amendment 2, to which I have added my name, and the other amendments in this initial grouping. I begin by paying tribute to my noble friend Lord Broers, who, as the House now knows, will leave this House at the end of this week. He is president of the Parliamentary and Scientific Committee and, as noble Lords can see for themselves, he has carried on, to the very end, making excellent arguments for science. I thank the Minister very much for the letter and the offer of further discussions and a meeting with the Minister for Science, which I welcome.

In view of the points that others have made, I will be very brief. As has been said more than once in its passage through your Lordships’ House, the Bill is more about an idea or experiment than it is about anything concrete—at least at this stage. No one, including the Government, can be entirely sure what will happen after we establish ARIA and it sets out to fulfil its mission. We can probably all agree that this is what makes it an exciting venture. But one thing that we can be sure of is that, if it all goes well, ARIA will amass a great deal of intellectual property over the next 10 years, and it will certainly be dealing with successful ideas about which we know nothing as yet.

So these amendments—Amendment 2 in particular—are essential to enable ARIA to benefit from the intellectual property that it creates, and we must ensure that, whatever it comes up with, its intellectual property cannot be sold off or acquired by others without its agreement. Not to agree this amendment would run a risk that I do not think we should run.